DAIRY farmers should be better able to understand and interpret commodity market price signals following the launch of the new Milk Price Index.

Agriculture Minister David Littleproud said farmers would be able to see an index of commodity prices received by Australian dairy processors for cheese, butter, skim milk powder and whole milk powder exports.

“There will also be a one-year forecast of prices that will be updated quarterly, along with regular global, national and regional commentary,” Mr Littleproud said.

“A Retrospective Farmgate Milk Price Index will also assist farmers. Once farmers begin providing prices via an online form, an index of actual prices received in each of the eight dairy regions will be built.

“The more dairy farmers take part, the better this index will be.”

Mr Littleproud said the commodity milk price index would be an extra tool to help dairy farmers plan ahead, with more market information on commodity dairy prices and global conditions.

“Better price transparency and market signals for farmers is a good thing,” Mr Littleproud said.

“We continue to consult industry and welcome feedback.”

The index is part of the government’s $579 million Dairy Support Package assisting farmers affected by retrospective cuts to farm gate milk prices in 2015-16 and is being managed by the Department of Agriculture. The department will also work with industry to educate farmers on how best to use and interpret market signals from the index.

Deloitte Access Economics is providing the economic modelling and analysis and RM Consulting Group is developing the education resources for dairy farmers.

Dairy is Australia’s third largest rural industry by farmgate value, with $3.685 billion in farmgate production in 2016-17.